Since, most people, use some sort of financing, primarily a mortgage, for a significant portion of their funding, for a house – purchase, doesn’t it make sense, for them, to know, in advance, their options and alternatives, and potential sources, for doing so? While there are many types of mortgages, which are generally, classified, as either conventional ones, or adjustable, there are, also, many options, as to where, one might secure, the needed and necessary funding. The major options, are, using a broker, a banker, or seller financing. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, how these work, etc.
1. Mortgage broker: A mortgage broker, operates, in a similar way, any other type of broker, does! He identifies, and qualifies, prospective clients, and, seeks a funder, who will best meet the specific needs of the home buyer, considering factors such as interest rates, length, terms, down – payment, and, who this specific individual, will benefit, from dealing with (and, of course, qualifications). This professional does not, personally, fund the funding, but, rather, serves as a conduit, for bringing the parties, together, to achieve the best objective. Those, who may not, automatically, qualify, easily, might find, this, their best course, because the broker, is able to shop – around, and find, an appropriate lender!
2. Mortgage banker: Unlike a broker, a mortgage banker, originates the loan, and, provides the funding, for the transaction. Sometimes, they may maintain the loan, for an extended period, while, others, might quickly sell the loan, to others, for servicing. These lenders are considered, primary, because, they provide the monies, rather than finding others, to do so. Obviously, this may be an advantageous, to some (usually, the most qualified), while, less so, to others!
3. Seller financing: In some instances, a seller of a property, may, either, be willing to (in order to expedite and simplify a transaction), or prefer to, self – fund, this financing. Sometimes, this is for the entire amount, while, at other times, it becomes a secondary form of funds, in order to help, an otherwise, qualified buyer, in terms of handling a significant down – payment. Much of this depends upon the overall, real estate market. Obviously, in most cases, we see more of this, when there is a buyers, than a, sellers market.
A wise, qualified, potential home buyer, knows, what’s available, and considers, what might best serve his best interests. Since, for most, the value of their house, represents their single – biggest, financial asset, doesn’t that make sense?